Digital currencies like Bitcoin, Ethereum, and others are no longer a niche topic but a part of the global financial market. Nevertheless, even perfectly legal crypto investors are increasingly coming under the scrutiny of law enforcement. Due to the use of automated evaluation systems—often referred to as “dumb algorithms” (DAIs)—there is currently an increased risk of being implicated in money laundering proceedings simply for ordinary buy and sell transactions.
Particularly striking is the focus on peer-to-peer (P2P) trading – even though this is legally permissible. Nevertheless, account suspensions and investigations occur regularly, with consequences for those affected that are not only financial but also personal.
Real case: Crypto investor becomes target of investigation
An example from our firm shows how quickly things can happen: A primary school teacher we represent, who has been trading cryptocurrencies privately and in compliance with tax regulations for years, sold her Bitcoin profits via a P2P exchange after the statutory holding period (one year) had expired. The profits were therefore tax-free.
In addition, she used the Peach Bitcoin platform to conduct further transactions. The payments were deposited into her various private accounts – which ultimately led her bank to file a suspicious activity report. Without warning or inquiry, an investigation was launched against her.
Lawyer István Cocron on the situation:
“ Many of our clients are completely unjustly targeted by the authorities. The mere use of P2P platforms is now enough to trigger a money laundering suspicion report – even if no criminal activity has occurred .”
What was the problem?
The teacher had no way of knowing her trading partners personally, as the platform automatically establishes contact between buyer and seller. Money laundering, however, requires a predicate offense – that is, illegally acquired money. The client was neither involved in illegal activities nor could she be held responsible for any actions of third parties.
What crypto investors should consider now:
To protect yourself from unnecessary legal proceedings, we recommend:
- Document all crypto transactions thoroughly – save screenshots, wallet addresses and timestamps.
- Use only reputable, ideally regulated P2P platforms.
- Tax-free sales can only be made after the one-year holding period has expired.
- Manage payment flows across multiple accounts cleanly and transparently.
- Seek legal advice as soon as there are initial indications of an investigation.
Once proceedings have been initiated, it is crucial to quickly request access to the case file through a lawyer in order to examine the background of the allegations.
Important: No one is obligated to provide information to the police or public prosecutor’s office. Review the case file first, then take action – never the other way around.
Conclusion
Current practice shows that even perfectly legal transactions in the cryptocurrency sector can lead to investigations. Anyone wanting to be on the safe side should professionally document their activities and seek legal advice immediately at the first sign of a problem.
